[14] Angeles v.
Philippine National Railways 1) May 5, 1980: Respondent Philippine National Railways (PNR) accepted
G.R. NO. 150128 | August 31, 2006 | GARCIA, J.
PETITIONER: LAUREANO T. ANGELES
RESPONDENT: PHILIPPINE NATIONAL RAILWAYS (PNR) AND RODOLFO
FLORES
TOPIC: Forms of Contract of Agency
SUMMARY
PNR accepted certain Romualdez’s offer to buy its scrap/unserviceable rails for Php
96,000. Romualdez then sent a letter to PNR’s Acting Purchasing Agent stating that
Lizette Wijanco Angeles (the wife of petitioner Angeles) as his “lawful representative
in the withdrawal of the scrap/unserviceable rails” awarded to him. The PNR
subsequently suspended the withdrawal because of documentary discrepancies and
reported pilferages of PNR scrap properties. Consequently, the spouses Angeles
demanded the refund of the amount of P96,000.00. PNR refused to pay so spouses
Angeles filed a suit against them. The Trial Court and the CA dismissed the complaint
because Lizette was merely a representative of Romualdez in the withdrawal of scrap
or unserviceable rails awarded to him and not an assignee to the latter's rights with
respect to the award.
The SC affirmed the dismissal of the lower courts and held that Lizette was to act just
as a "representative" of Romualdez in the "withdrawal of rails," and not an assignee.
Unlike in an assignee where an agent may sue on a contract made for his principal,
an agent has neither rights nor liabilities as against the third party (which in this case
is the PNR). Romualdez's use of the active verb "authorized," instead of "assigned,"
indicated that he intended to limit Lizette's role in the scrap transaction to being the
representative of his interest therein.
PROVISIONS APPLICABLE
Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
Art. 1374 The various stipulations of a contract shall be interpreted together,
attributing to the doubtful ones that sense which may result from all of them taken
jointly.
DOCTRINE
- Principal" and "agent," are not the only terms used to designate the parties
in an agency relation. The agent may also be called an attorney, proxy,
delegate or, as here, representative.
- The written authorization itself is the power of attorney, and this is clearly
indicated by the fact that it has also been called a "letter of attorney."
FACTS
Gaudencio Romualdez’s offer to buy the PNR's scrap/unserviceable rails
located in Del Carmen and Lubao, Pampanga at P1,300.00 and P2,100.00 per metric
ton, respectively, for the total amount of P96,600.00.
2) After paying the stated purchase price, Romualdez addressed a letter to Atty.
Cipriano Dizon, PNR's Acting Purchasing Agent. Bearing date May 26, 1980, the
letter reads:
“Dear Atty. Dizon:
This is to inform you as President of San Juanico Enterprises, that I have authorized the
bearer, LIZETTE R. WIJANCO of No. 1606 Aragon St., Sta. Cruz, Manila, to be my lawful
representative in the withdrawal of the scrap/unserviceable rails awarded to me.
For this reason, I have given her the original copy of the award, dated May 5, 1980 and
O.R. No. 8706855 dated May 20, 1980 which will indicate my waiver of rights, interests and
participation in favor of LIZETTE R. WIJANCO.
Thank you for your cooperation.
Very truly yours,
(Sgd.) Gaudencio Romualdez”
3) May 26, 1980 - Lizette requested the PNR to transfer the location of withdrawal
because the scrap/unserviceable rails located in Del Carmen and Lubao, Pampanga
were not ready for hauling.
 The PNR granted said request and allowed Lizette to withdraw
scrap/unserviceable rails in Murcia, Capas and San Miguel, Tarlac instead.
 However, the PNR subsequently suspended the withdrawal because of
documentary discrepancies coupled by reported pilferages of over
P500,000.00 worth of PNR scrap properties in Tarlac.
4) Consequently, the spouses Angeles demanded the refund of the amount of
P96,000.00.
 The PNR, however, refused to pay, alleging that as per delivery receipt
duly signed by Lizette, 54.658 metric tons of unserviceable rails had already
been withdrawn which, at P2,100.00 per metric ton, were worth
P114,781.80, an amount that exceeds the claim for refund.
5) August 10, 1988: the spouses Angeles filed suit against the PNR and its
corporate secretary, Rodolfo Flores, among others, for specific performance and
damages before the Regional Trial Court of Quezon City. They prayed that PNR
be directed to deliver 46 metric tons of scrap/unserviceable rails and to pay them
damages and attorney's fees.
 April 16, 1996: Trial court dismissed the complaint for lack of cause of
action. It held that Lizette was merely a representative of Romualdez in
the withdrawal of scrap or unserviceable rails awarded to him and not
an assignee to the latter's rights with respect to the award.
6) June 4, 2001: CA dismissed the appeal and affirmed that of the trial court.
 September 17, 2001: CA denied the petitioner's motion for
reconsideration.
 PETITIONER: the second paragraph of the Romualdez letter, stating - "I
ISSUES, HELD, RATIO
W/N the letter of Romualdez has an effect of designating Lizette Angeles as a mere
agent or an assignee of Romuladez’s interest in the scrap rails awarded to San
Juanico Enterprises? – As a mere agent
- As correctly affirmed by the CA, Lizette was not an assignee, but merely an
agent whose authority was limited to the withdrawal of the scrap rails, hence,
without personality to sue.
o IF AS A MERE AGENT: Where agency exists, the third party's (in this
case, PNR's) liability on a contract is to the principal and not to the
agent and the relationship of the third party to the principal is the same as
that in a contract in which there is no agent.
o Since a contract may be violated only by the parties thereto as
against each other, the real party-in-interest, either as plaintiff or
defendant in an action upon that contract must, generally, be a
contracting party
o The agent has neither rights nor liabilities as against the third
party. He cannot thus sue or be sued on the contract.
o IF AS AN ASSIGNEE: The agent may, in his own behalf, sue on a contract
made for his principal, as an assignee of such contract.
o When one has a right assigned to him, he is then the real party-in-
interest and may maintain an action upon such claim or right.
- IN THE CASE AT BAR: Upon examining Romualdez's letter to Atty. Cipriano Dizon
dated May 26, 1980, it is apparent that Lizette was to act just as a "representative"
of Romualdez in the "withdrawal of rails," and not an assignee.
 “ I have authorized the bearer, LIZETTE R. WIJANCO x x x to be my
lawful representative in the withdrawal of the scrap/unserviceable rails
awarded to me.
For this reason, I have given her the original copy x x x”
o If Lizette was without legal standing to sue and appear in this case,
there is more reason to hold that her petitioner husband, either as
her conjugal partner or her heir, is also without such standing.
 PETITIONER: The fact that the terms "agent" or "attorney-in-fact" were not
used in the Romualdez letter aforestated.
o SC:
 “Principal" and "agent," are not the only terms used to
designate the parties in an agency relation.
 The agent may also be called an attorney, proxy,
delegate or, as here, representative.
 Romualdez's use of the active verb "authorized," instead
of "assigned," indicated that he intended to limit Lizette's
role in the scrap transaction to being the
representative of his interest therein.
have given [Lizette] the original copy of the award x x x which will indicate
my waiver of rights, interests and participation in favor of Lizette R. Wijanco"
clarifies that Lizette was intended to be an assignee, and not a mere
agent.
o SC: The petitioner conveniently omitted an important phrase
preceding the paragraph which would have put the whole matter in
context.
 The phrase is "For this reason," and the antecedent
thereof is his (Romualdez) having appointed Lizette as his
representative in the matter of the withdrawal of the scrap
items.
 In fine, the key phrase clearly conveys the idea that
Lizette was given the original copy of the contract
award to enable her to withdraw the rails as
Romualdez's authorized representative.
o According to Article 1374, various stipulations of a contract shall
be read and interpreted together and that the real intention of the
parties is primarily to be determined from the language used and
gathered from the whole instrument.
 When put into the context of the letter as a whole, it is
clear that the rights which Romualdez waived or ceded
in favor of Lizette were those in furtherance of the
agency relation that he had established for the
withdrawal of the rails.
o Any doubt as to the intent of Romualdez could be clarified by the
acts of the main players themselves.
 Article 1371 of the Civil Code provides that to judge the
intention of the contracting parties, their
contemporaneous and subsequent acts shall be
principally considered.
 The fact of agency was, as the trial court aptly observed,
confirmed in subsequent letters from the Angeles
spouses in which they themselves refer to Lizette as
"authorized representative" of San Juanico Enterprises.
 The withdrawal receipt which Lizette had signed
indicated that she was doing so in a representative
capacity.
 One professing to act as agent for another is
estopped to deny his agency both as against his
asserted principal and third persons interested in
the transaction which he engaged in.
  PETITIONER: The Romualdez letter in question was not in the form of a
special power of attorney, implying that the latter had not intended to merely
authorize his wife, Lizette, to perform an act for him (Romualdez).
o SC: A power of attorney is only but an instrument in writing by
which a person, as principal, appoints another as his agent and
confers upon him the authority to perform certain specified acts on
behalf of the principal.
 The written authorization itself is the power of
attorney, and this is clearly indicated by the fact that it
has also been called a "letter of attorney."
 A power of attorney must be strictly construed and
pursued. The instrument will be held to grant only
those powers which are specified therein, and the
agent may neither go beyond nor deviate from the
power of attorney.
 Contextually, all that Lizette was authorized to
do was to withdraw the unserviceable/scrap
railings. Allowing her authority to sue
therefor, especially in her own name, would
be to read something not intended, let alone
written in the Romualdez letter.
 PETITIONER: Lizette paid the amount of P96,000.00 to the PNR
o Sc: This appears to be a mere afterthought; it ought to be
dismissed outright under the estoppel principle. In earlier
proceedings, petitioner himself admitted in his complaint that it was
Romualdez who paid this amount.

- The lower courts had peremptorily determined that Lizette, with respect to the
withdrawal of the scrap in question, was acting for Romualdez.

 There were substantial pieces of evidence adduced to support this

determination.
 Factual findings of the trial court, adopted and confirmed by the CA, are, as
a rule, final and conclusive and may not be disturbed on appeal

RULING

Petition is DISMISSED.